First Union and Wachovia to Merge; Creating the Premier East Coast Financial Services Company

Apr 16, 2001, 01:00 ET from First Union Corporation and Wachovia Corporation

    CHARLOTTE and WINSTON-SALEM, N.C., April 16 /PRNewswire/ -- First Union
 Corporation (NYSE:   FTU) and Wachovia Corporation (NYSE:   WB) said today they
 have signed a definitive agreement for a merger of equals.
     The combined company, which will be known as Wachovia Corporation, will
 offer its 19 million combined customers an unprecedented array of corporate
 banking, retail banking, asset and wealth management, capital markets and
 securities brokerage services and products. With total assets of $324 billion
 and a market capitalization of $45 billion, the company will be the largest
 financial holding company in its Southeast/East Coast region and the fourth
 largest nationwide.  The company will be headquartered in Charlotte, and
 maintain the regional headquarters for its North and South Carolina banks in
 Winston-Salem.
     Terms of the agreement call for common stockholders of Wachovia to receive
 2.0 shares of common stock of First Union in exchange for each share of
 Wachovia common stock.  In addition, Wachovia's board is expected to approve a
 special 48 cents per common share dividend payable prior to closing in the
 third quarter.  The purchase accounting transaction will be immediately
 accretive to the cash earnings per share of both companies upon closing, and
 will provide an internal rate of return in excess of 20 percent for both
 groups of shareholders.
     When the merger is completed, L.M. Baker Jr., chairman, president and
 chief executive officer of Wachovia, will become chairman of the new
 organization.  G. Kennedy Thompson, chairman, president and chief executive
 officer of First Union, will become president and chief executive officer of
 the new company.  The board of directors of the combined company will comprise
 18 members, with nine coming from the Wachovia board and nine from the First
 Union board.
     "Together, this new company will have what superregional banks rarely
 have: a full line of financial products, services and distribution
 capabilities, sufficient density of coverage and depth of talent to leverage
 its leading share in key growth markets, strong capital position and an
 experienced management team.  These strengths will enable superior growth
 rates in revenues and profits," said Baker.  "At the core, each company has an
 accomplished corporate bank, a wonderfully positioned retail franchise, and
 unbeatable opportunities in wealth and asset management.  Our home region has
 great economic fundamentals.  Our corporate cultures are very similar, focused
 on customer relationships."
     "Wachovia and First Union have a common vision, common values, common
 markets -- and now a common name," said Thompson.  "While scale is important
 in this business, this merger is about getting better, not just bigger."
     The companies said the new Wachovia will have leading market share in
 numerous high growth markets, with an extensive product offering - the No. 1
 retail bank in the East, No. 1 in small business banking, a leading national
 brokerage and fund manager, an investment bank focused on growth companies and
 a well-positioned corporate bank.  The new Wachovia will have total deposits
 of $183 billion, assets under management of $222 billion and mutual fund
 assets of $96 billion.  The company's 19 million customers (3.1 million of
 them on-line) will be served by 90,000 total employees, 2,900 banking
 branches, 5,100 ATMs, and nearly 600 brokerage offices staffed by
 8,300 registered representatives.
 
     Wachovia and First Union also have designated the other key members of the
 new company's senior management team:
 
     -- Robert P. Kelly, executive vice president and chief financial officer
        of First Union, will become chief financial officer;
 
     -- Donald K. Truslow, senior executive vice president and chief risk
        officer of Wachovia, will become chief risk management officer;
        Benjamin P. Jenkins III, vice chairman of First Union, will head
        General Banking;
 
     -- Stanhope A. Kelly, senior executive vice president of Wachovia, will
        head Wealth Management;
 
     -- Donald A. McMullen Jr., vice chairman of First Union, will head
        Brokerage and Asset Management;
 
     -- W. Barnes Hauptfuhrer, managing director, and Stephen E. Cummings,
        managing director, of First Union, will co-head Corporate and
        Investment Banking;
 
     -- Paul G. George, executive vice president of Wachovia, will head Human
        Resources;
 
     -- Jean E. Davis, senior executive vice president of Wachovia, will head
        Operations and Technology;
 
     -- Mark C. Treanor, executive vice president, secretary and general
        counsel of First Union, will head Legal Affairs;
 
     -- Robert S. McCoy Jr., vice chairman and chief financial officer of
        Wachovia, and David M. Carroll, executive vice president of First
        Union, will head the merger integration team.
 
     The companies expect the merger integration process to be completed in
 three years.
     "Successful mergers today are about satisfied customers and energized
 employees," said Thompson. "Throughout this transition, customers will remain
 our top priority.  Our customers will benefit from enhanced products and
 services and the best employee talent in the industry.  Our unwavering
 commitment to teamwork and quality will help ensure a seamless transition for
 all customers."
     The companies expect the merger to generate $890 million in annual expense
 reductions, phased in over the three-year integration period. This equals
 eight percent of the companies' current combined expense base.  The companies
 expect to take merger-related one-time charges of $1.45 billion, related to
 staff training, retention and severance; real estate; systems integration; and
 other miscellaneous accruals.  The companies believe that they may be required
 to divest approximately $1.5 billion to $2 billion in deposits as a condition
 of regulatory approval.  Over the three-year integration period, the combined
 staff will be reduced by approximately 7,000 positions. Close to half of this
 reduction is expected to be achieved through normal attrition.
     "Our policy in integrating our companies will be to provide the best value
 to customers and the best service to our communities.  We will select the best
 of the best -- systems, facilities, products and people -- to attract, retain
 and enhance customer relationships," said Baker.
     "Both companies have a long and proud tradition of outstanding community
 service.  Together, we will be able to strengthen our community leadership,
 and our shared commitment to the communities we serve will be made more
 powerful by this merger," concluded Baker.
     The combined company expects to pay a quarterly cash dividend of 24 cents
 per common share, and to maintain over time a dividend payout ratio of
 35 percent to 40 percent of its earnings.
 
     The transaction will be accounted for under purchase accounting.  It is
 expected to close in the third quarter of 2001 and is subject to normal
 shareholder and regulatory approvals.  The merger has been unanimously
 approved by the boards of directors of both companies.  Wachovia and First
 Union have granted each other options to purchase, under certain
 circumstances, up to 19.9 percent of each other's outstanding common shares.
 Wachovia was represented by Credit Suisse First Boston and Simpson Thacher &
 Bartlett.  First Union was represented by Merrill Lynch and Sullivan &
 Cromwell.
 
     First Union: (NYSE:   FTU), with $253 billion in assets and stockholders'
 equity of $16 billion at March 31, 2001, is a leading provider of financial
 services to 15 million retail and corporate customers throughout the East
 Coast and the nation.  The company operates full-service banking offices in 11
 East Coast states and Washington, D.C., and full-service brokerage offices in
 47 states.  Online banking products and services can be accessed through
 http://www.firstunion.com.
 
     Wachovia:  (NYSE:   WB) is a major interstate financial holding company
 offering banking and financial services to individuals primarily in Florida,
 Georgia, North Carolina, South Carolina and Virginia and to corporations and
 institutions throughout the United States and globally.  Wachovia Corporation
 is headquartered in Winston-Salem, N.C., and Atlanta, and had assets of
 $74 billion at December 31, 2000.
 
     Announcement Conference Call:  Ken Thompson and Bud Baker will discuss the
 combination of the two companies on a conference call at 10:45 a.m. EDT on
 Monday, April 16. The call will be available by telephone and audio webcast.
 During the call, the speakers will review information presented in handouts
 that are available through http://www.firstunion.com or
 http://www.wachovia.com and through fax-on-demand at 800-281-3244, code 700.
 Participants are encouraged to access the handouts before the teleconference
 begins.
 
     Webcast Instructions:  To gain access to the webcast, which will be
 "listen-only," go to http://www.firstunion.com or http://www.wachovia.com and
 click on the audio webcast link.  Please log on to the Web site at least
 10 minutes prior to the call to register and download and install any
 necessary audio software.  A replay of the webcast also will be available
 beginning at 1 p.m. today.
 
     Teleconference Instructions:  The telephone number to participate in
 today's teleconference is 888-946-7205 for U.S. callers (or 712-271-0175 for
 international callers).  You will be asked to provide your name and business
 affiliation. Mention the conference access code: 33345.  A continuous
 telephone replay will be available beginning at 1 p.m. today through 5 p.m. on
 Monday, April 23. The replay telephone number is 402-998-1145.
 
     Video New Release: B-roll with footage of Ken Thompson and Bud Baker and
 of the two companies can be downlinked from the following coordinates: Telstar
 5, Transponder 16, Downlink frequency 4020 Horizontal, 8:00-8:30 a.m. EDT and
 12:00-12:30 p.m. EDT.
 
     This news release contains forward-looking statements within the meaning
 of the Private Securities Litigation Reform Act of 1995, including, without
 limitation, (i) statements about the benefits of the merger between First
 Union Corporation and Wachovia Corporation, including future financial and
 operating results, cost savings, enhanced revenues, and accretion to reported
 earnings that may be realized from the merger; (ii) statements with respect to
 First Union's and Wachovia's plans, objectives, expectations and intentions
 and other statements that are not historical facts; and (iii) other statements
 identified by words such as "believes", "expects", "anticipates", "estimates",
 "intends", "plans", "targets" and similar expressions.  These statements are
 based upon the current beliefs and expectations of First Union's and
 Wachovia's management and are subject to significant risks and uncertainties.
 Actual results may differ from those set forth in the forward-looking
 statements.
 
     The following factors, among others, could cause actual results to differ
 materially from the anticipated results or other expectations expressed in
 such forward-looking statements: (1) the risk that the businesses of First
 Union and Wachovia will not be integrated successfully or such integration may
 be more difficult, time-consuming or costly than expected; (2) expected
 revenue synergies and cost savings from the merger may not be fully realized
 or realized within the expected time frame; (3) revenues following the merger
 may be lower than expected; (4) deposit attrition, operating costs, customer
 loss and business disruption following the merger, including, without
 limitation, difficulties in maintaining relationships with employees, may be
 greater than expected; (5) the ability to obtain governmental approvals of the
 merger on the proposed terms and schedule; (6) the failure of First Union's
 and Wachovia's stockholders to approve the merger; (7) competitive pressures
 among depository and other financial institutions may increase significantly
 and have an effect on pricing, spending, third-party relationships and
 revenues; (8) the strength of the United States economy in general and the
 strength of the local economies in which the combined company will conduct
 operations may be different than expected resulting in, among other things, a
 deterioration in credit quality or a reduced demand for credit, including the
 resultant effect on the combined company's loan portfolio and allowance for
 loan losses; (9) changes in the U.S. and foreign legal and regulatory
 framework; and (10) adverse conditions in the stock market, the public debt
 market and other capital markets (including changes in interest rate
 conditions) and the impact of such conditions on the combined company's
 capital markets and asset management activities.  Additional factors that
 could cause First Union's and Wachovia's results to differ materially from
 those described in the forward-looking statements can be found in First
 Union's and Wachovia's Annual Reports on Form 10-K, Quarterly Reports on Form
 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange
 Commission.  All subsequent written and oral forward-looking statements
 concerning the proposed transaction or other matters and attributable to First
 Union or Wachovia or any person acting on their behalf are expressly qualified
 in their entirety by the cautionary statements referenced above.  First Union
 and Wachovia do not undertake any obligation to update any forward-looking
 statement to reflect circumstances or events that occur after the date the
 forward-looking statements are made.
 
     Additional Information
     The proposed transaction will be submitted to First Union's and Wachovia's
 stockholders for their consideration, and First Union and Wachovia will file a
 registration statement, a joint proxy statement/prospectus and other relevant
 documents concerning the proposed transaction with the SEC.  Stockholders are
 urged to read the registration statement and the joint proxy
 statement/prospectus regarding the proposed transaction when it becomes
 available and any other relevant documents filed with the SEC, as well as any
 amendments or supplements to those documents, because they will contain
 important information.  You will be able to obtain a free copy of the joint
 proxy statement/prospectus, as well as other filings containing information
 about First Union and Wachovia, at the SEC's Internet site
 (http://www.sec.gov).  Copies of the joint proxy statement/prospectus and the
 SEC filings that will be incorporated by reference in the joint proxy
 statement/prospectus can also be obtained, without charge, by directing a
 request to First Union Corporation, Investor Relations, One First Union
 Center, 301 South College Street, Charlotte, NC 28288-0206, (704)-374-6782, or
 to Wachovia Corporation, Investor Relations, 100 North Main Street,
 Winston-Salem, NC 27150, (888)-492-6397.
 
     First Union and Wachovia, and their respective directors and executive
 officers, may be deemed to be participants in the solicitation of proxies from
 the stockholders of First Union and Wachovia in connection with the merger.
 Information about the directors and executive officers of First Union and
 their ownership of First Union common stock is set forth in the proxy
 statement, dated March 13, 2001, for First Union's 2001 annual meeting of
 stockholders, as filed with the SEC on a Schedule 14A.  Information about the
 directors and executive officers of Wachovia and their ownership of Wachovia
 common stock is set forth in the proxy statement, dated March 19, 2001, for
 Wachovia's 2001 annual meeting of stockholders, as filed with the SEC on a
 Schedule 14A.  Additional information regarding the interests of those
 participants may be obtained by reading the joint proxy statement/prospectus
 regarding the proposed transaction when it becomes available.
 
 
              First Union and Wachovia Proposed Merger At-A-Glance
 
     The Agreement
     -- First Union (NYSE:   FTU) and Wachovia (NYSE:   WB) signed a definitive
        agreement on April 15, 2001.
     -- Wachovia shareholders receive 2 First Union shares for each Wachovia
        common share.
     -- The value of the new shares issued would be approximately $13.4
        billion.
     -- The combined company will be known as Wachovia with headquarters in
        Charlotte, N.C.
     -- Targeted closing date: third quarter 2001, pending regulatory,
        shareholder approvals
     -- Joint Integration Team has been established to plan and manage
        transition.
 
     The Combined Organization
     -- Management:  Bud Baker, CEO of Wachovia will serve as chairman
                     Ken Thompson, CEO of First Union will serve as president
                     and CEO
     -- The combined board of directors will be composed of nine from First
        Union and nine from Wachovia
     -- Assets: $324 billion (excluding cards, at period end 3/31/01)
     -- Deposits: $182.9 billion (domestic deposits, at 3/31/01)
     -- Branches: 2,900 bank branches
     -- ATMs: 5,100 (at 12/31/00)
     -- Customers: 18.8 million (at 12/31/00)
     -- Employees: 90,296 (anticipated to be reduced by 7,000)
     -- Full Service Brokerage Offices: 592
     -- National Ranking:
        -- No. 4 among U.S. banking companies, by assets
        -- No. 1 in deposit share on the East Coast and No. 2 nationally
        -- No. 1 in cash management
        -- No. 2 bank-owned broker/dealer network
        -- No. 3 in U.S. bank branches
        -- No. 4 bank-owned mutual fund complex, by assets
 
     Shareholders are urged to read the joint proxy statement/prospectus
 regarding the proposed transaction with Wachovia Corporation when it becomes
 available, because it will contain important information. Shareholders will be
 able to obtain a free copy of the joint proxy statement/prospectus, as well as
 other filings containing information about First Union and Wachovia, without
 charge, at the SEC's internet site (http://www.sec.gov). Copies of the joint
 proxy statement/prospectus and the SEC filings that will be incorporated by
 reference in the joint proxy statement/prospectus can also be obtained,
 without charge, by directing a request to First Union Corporation, Investor
 Relations, One First Union Center, Charlotte, North Carolina, 28288-0206
 (704-374-6782) or to Wachovia Corporation, 100 North Main Street,
 Winston-Salem, North Carolina 27150 (888-492-6397). Information regarding the
 participants in the proxy solicitation and a description of their direct and
 indirect interest, by security holdings or otherwise, is contained in the
 materials filed with the SEC by each of First Union and Wachovia on April 16,
 2001.
 
 

SOURCE First Union Corporation and Wachovia Corporation
    CHARLOTTE and WINSTON-SALEM, N.C., April 16 /PRNewswire/ -- First Union
 Corporation (NYSE:   FTU) and Wachovia Corporation (NYSE:   WB) said today they
 have signed a definitive agreement for a merger of equals.
     The combined company, which will be known as Wachovia Corporation, will
 offer its 19 million combined customers an unprecedented array of corporate
 banking, retail banking, asset and wealth management, capital markets and
 securities brokerage services and products. With total assets of $324 billion
 and a market capitalization of $45 billion, the company will be the largest
 financial holding company in its Southeast/East Coast region and the fourth
 largest nationwide.  The company will be headquartered in Charlotte, and
 maintain the regional headquarters for its North and South Carolina banks in
 Winston-Salem.
     Terms of the agreement call for common stockholders of Wachovia to receive
 2.0 shares of common stock of First Union in exchange for each share of
 Wachovia common stock.  In addition, Wachovia's board is expected to approve a
 special 48 cents per common share dividend payable prior to closing in the
 third quarter.  The purchase accounting transaction will be immediately
 accretive to the cash earnings per share of both companies upon closing, and
 will provide an internal rate of return in excess of 20 percent for both
 groups of shareholders.
     When the merger is completed, L.M. Baker Jr., chairman, president and
 chief executive officer of Wachovia, will become chairman of the new
 organization.  G. Kennedy Thompson, chairman, president and chief executive
 officer of First Union, will become president and chief executive officer of
 the new company.  The board of directors of the combined company will comprise
 18 members, with nine coming from the Wachovia board and nine from the First
 Union board.
     "Together, this new company will have what superregional banks rarely
 have: a full line of financial products, services and distribution
 capabilities, sufficient density of coverage and depth of talent to leverage
 its leading share in key growth markets, strong capital position and an
 experienced management team.  These strengths will enable superior growth
 rates in revenues and profits," said Baker.  "At the core, each company has an
 accomplished corporate bank, a wonderfully positioned retail franchise, and
 unbeatable opportunities in wealth and asset management.  Our home region has
 great economic fundamentals.  Our corporate cultures are very similar, focused
 on customer relationships."
     "Wachovia and First Union have a common vision, common values, common
 markets -- and now a common name," said Thompson.  "While scale is important
 in this business, this merger is about getting better, not just bigger."
     The companies said the new Wachovia will have leading market share in
 numerous high growth markets, with an extensive product offering - the No. 1
 retail bank in the East, No. 1 in small business banking, a leading national
 brokerage and fund manager, an investment bank focused on growth companies and
 a well-positioned corporate bank.  The new Wachovia will have total deposits
 of $183 billion, assets under management of $222 billion and mutual fund
 assets of $96 billion.  The company's 19 million customers (3.1 million of
 them on-line) will be served by 90,000 total employees, 2,900 banking
 branches, 5,100 ATMs, and nearly 600 brokerage offices staffed by
 8,300 registered representatives.
 
     Wachovia and First Union also have designated the other key members of the
 new company's senior management team:
 
     -- Robert P. Kelly, executive vice president and chief financial officer
        of First Union, will become chief financial officer;
 
     -- Donald K. Truslow, senior executive vice president and chief risk
        officer of Wachovia, will become chief risk management officer;
        Benjamin P. Jenkins III, vice chairman of First Union, will head
        General Banking;
 
     -- Stanhope A. Kelly, senior executive vice president of Wachovia, will
        head Wealth Management;
 
     -- Donald A. McMullen Jr., vice chairman of First Union, will head
        Brokerage and Asset Management;
 
     -- W. Barnes Hauptfuhrer, managing director, and Stephen E. Cummings,
        managing director, of First Union, will co-head Corporate and
        Investment Banking;
 
     -- Paul G. George, executive vice president of Wachovia, will head Human
        Resources;
 
     -- Jean E. Davis, senior executive vice president of Wachovia, will head
        Operations and Technology;
 
     -- Mark C. Treanor, executive vice president, secretary and general
        counsel of First Union, will head Legal Affairs;
 
     -- Robert S. McCoy Jr., vice chairman and chief financial officer of
        Wachovia, and David M. Carroll, executive vice president of First
        Union, will head the merger integration team.
 
     The companies expect the merger integration process to be completed in
 three years.
     "Successful mergers today are about satisfied customers and energized
 employees," said Thompson. "Throughout this transition, customers will remain
 our top priority.  Our customers will benefit from enhanced products and
 services and the best employee talent in the industry.  Our unwavering
 commitment to teamwork and quality will help ensure a seamless transition for
 all customers."
     The companies expect the merger to generate $890 million in annual expense
 reductions, phased in over the three-year integration period. This equals
 eight percent of the companies' current combined expense base.  The companies
 expect to take merger-related one-time charges of $1.45 billion, related to
 staff training, retention and severance; real estate; systems integration; and
 other miscellaneous accruals.  The companies believe that they may be required
 to divest approximately $1.5 billion to $2 billion in deposits as a condition
 of regulatory approval.  Over the three-year integration period, the combined
 staff will be reduced by approximately 7,000 positions. Close to half of this
 reduction is expected to be achieved through normal attrition.
     "Our policy in integrating our companies will be to provide the best value
 to customers and the best service to our communities.  We will select the best
 of the best -- systems, facilities, products and people -- to attract, retain
 and enhance customer relationships," said Baker.
     "Both companies have a long and proud tradition of outstanding community
 service.  Together, we will be able to strengthen our community leadership,
 and our shared commitment to the communities we serve will be made more
 powerful by this merger," concluded Baker.
     The combined company expects to pay a quarterly cash dividend of 24 cents
 per common share, and to maintain over time a dividend payout ratio of
 35 percent to 40 percent of its earnings.
 
     The transaction will be accounted for under purchase accounting.  It is
 expected to close in the third quarter of 2001 and is subject to normal
 shareholder and regulatory approvals.  The merger has been unanimously
 approved by the boards of directors of both companies.  Wachovia and First
 Union have granted each other options to purchase, under certain
 circumstances, up to 19.9 percent of each other's outstanding common shares.
 Wachovia was represented by Credit Suisse First Boston and Simpson Thacher &
 Bartlett.  First Union was represented by Merrill Lynch and Sullivan &
 Cromwell.
 
     First Union: (NYSE:   FTU), with $253 billion in assets and stockholders'
 equity of $16 billion at March 31, 2001, is a leading provider of financial
 services to 15 million retail and corporate customers throughout the East
 Coast and the nation.  The company operates full-service banking offices in 11
 East Coast states and Washington, D.C., and full-service brokerage offices in
 47 states.  Online banking products and services can be accessed through
 http://www.firstunion.com.
 
     Wachovia:  (NYSE:   WB) is a major interstate financial holding company
 offering banking and financial services to individuals primarily in Florida,
 Georgia, North Carolina, South Carolina and Virginia and to corporations and
 institutions throughout the United States and globally.  Wachovia Corporation
 is headquartered in Winston-Salem, N.C., and Atlanta, and had assets of
 $74 billion at December 31, 2000.
 
     Announcement Conference Call:  Ken Thompson and Bud Baker will discuss the
 combination of the two companies on a conference call at 10:45 a.m. EDT on
 Monday, April 16. The call will be available by telephone and audio webcast.
 During the call, the speakers will review information presented in handouts
 that are available through http://www.firstunion.com or
 http://www.wachovia.com and through fax-on-demand at 800-281-3244, code 700.
 Participants are encouraged to access the handouts before the teleconference
 begins.
 
     Webcast Instructions:  To gain access to the webcast, which will be
 "listen-only," go to http://www.firstunion.com or http://www.wachovia.com and
 click on the audio webcast link.  Please log on to the Web site at least
 10 minutes prior to the call to register and download and install any
 necessary audio software.  A replay of the webcast also will be available
 beginning at 1 p.m. today.
 
     Teleconference Instructions:  The telephone number to participate in
 today's teleconference is 888-946-7205 for U.S. callers (or 712-271-0175 for
 international callers).  You will be asked to provide your name and business
 affiliation. Mention the conference access code: 33345.  A continuous
 telephone replay will be available beginning at 1 p.m. today through 5 p.m. on
 Monday, April 23. The replay telephone number is 402-998-1145.
 
     Video New Release: B-roll with footage of Ken Thompson and Bud Baker and
 of the two companies can be downlinked from the following coordinates: Telstar
 5, Transponder 16, Downlink frequency 4020 Horizontal, 8:00-8:30 a.m. EDT and
 12:00-12:30 p.m. EDT.
 
     This news release contains forward-looking statements within the meaning
 of the Private Securities Litigation Reform Act of 1995, including, without
 limitation, (i) statements about the benefits of the merger between First
 Union Corporation and Wachovia Corporation, including future financial and
 operating results, cost savings, enhanced revenues, and accretion to reported
 earnings that may be realized from the merger; (ii) statements with respect to
 First Union's and Wachovia's plans, objectives, expectations and intentions
 and other statements that are not historical facts; and (iii) other statements
 identified by words such as "believes", "expects", "anticipates", "estimates",
 "intends", "plans", "targets" and similar expressions.  These statements are
 based upon the current beliefs and expectations of First Union's and
 Wachovia's management and are subject to significant risks and uncertainties.
 Actual results may differ from those set forth in the forward-looking
 statements.
 
     The following factors, among others, could cause actual results to differ
 materially from the anticipated results or other expectations expressed in
 such forward-looking statements: (1) the risk that the businesses of First
 Union and Wachovia will not be integrated successfully or such integration may
 be more difficult, time-consuming or costly than expected; (2) expected
 revenue synergies and cost savings from the merger may not be fully realized
 or realized within the expected time frame; (3) revenues following the merger
 may be lower than expected; (4) deposit attrition, operating costs, customer
 loss and business disruption following the merger, including, without
 limitation, difficulties in maintaining relationships with employees, may be
 greater than expected; (5) the ability to obtain governmental approvals of the
 merger on the proposed terms and schedule; (6) the failure of First Union's
 and Wachovia's stockholders to approve the merger; (7) competitive pressures
 among depository and other financial institutions may increase significantly
 and have an effect on pricing, spending, third-party relationships and
 revenues; (8) the strength of the United States economy in general and the
 strength of the local economies in which the combined company will conduct
 operations may be different than expected resulting in, among other things, a
 deterioration in credit quality or a reduced demand for credit, including the
 resultant effect on the combined company's loan portfolio and allowance for
 loan losses; (9) changes in the U.S. and foreign legal and regulatory
 framework; and (10) adverse conditions in the stock market, the public debt
 market and other capital markets (including changes in interest rate
 conditions) and the impact of such conditions on the combined company's
 capital markets and asset management activities.  Additional factors that
 could cause First Union's and Wachovia's results to differ materially from
 those described in the forward-looking statements can be found in First
 Union's and Wachovia's Annual Reports on Form 10-K, Quarterly Reports on Form
 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange
 Commission.  All subsequent written and oral forward-looking statements
 concerning the proposed transaction or other matters and attributable to First
 Union or Wachovia or any person acting on their behalf are expressly qualified
 in their entirety by the cautionary statements referenced above.  First Union
 and Wachovia do not undertake any obligation to update any forward-looking
 statement to reflect circumstances or events that occur after the date the
 forward-looking statements are made.
 
     Additional Information
     The proposed transaction will be submitted to First Union's and Wachovia's
 stockholders for their consideration, and First Union and Wachovia will file a
 registration statement, a joint proxy statement/prospectus and other relevant
 documents concerning the proposed transaction with the SEC.  Stockholders are
 urged to read the registration statement and the joint proxy
 statement/prospectus regarding the proposed transaction when it becomes
 available and any other relevant documents filed with the SEC, as well as any
 amendments or supplements to those documents, because they will contain
 important information.  You will be able to obtain a free copy of the joint
 proxy statement/prospectus, as well as other filings containing information
 about First Union and Wachovia, at the SEC's Internet site
 (http://www.sec.gov).  Copies of the joint proxy statement/prospectus and the
 SEC filings that will be incorporated by reference in the joint proxy
 statement/prospectus can also be obtained, without charge, by directing a
 request to First Union Corporation, Investor Relations, One First Union
 Center, 301 South College Street, Charlotte, NC 28288-0206, (704)-374-6782, or
 to Wachovia Corporation, Investor Relations, 100 North Main Street,
 Winston-Salem, NC 27150, (888)-492-6397.
 
     First Union and Wachovia, and their respective directors and executive
 officers, may be deemed to be participants in the solicitation of proxies from
 the stockholders of First Union and Wachovia in connection with the merger.
 Information about the directors and executive officers of First Union and
 their ownership of First Union common stock is set forth in the proxy
 statement, dated March 13, 2001, for First Union's 2001 annual meeting of
 stockholders, as filed with the SEC on a Schedule 14A.  Information about the
 directors and executive officers of Wachovia and their ownership of Wachovia
 common stock is set forth in the proxy statement, dated March 19, 2001, for
 Wachovia's 2001 annual meeting of stockholders, as filed with the SEC on a
 Schedule 14A.  Additional information regarding the interests of those
 participants may be obtained by reading the joint proxy statement/prospectus
 regarding the proposed transaction when it becomes available.
 
 
              First Union and Wachovia Proposed Merger At-A-Glance
 
     The Agreement
     -- First Union (NYSE:   FTU) and Wachovia (NYSE:   WB) signed a definitive
        agreement on April 15, 2001.
     -- Wachovia shareholders receive 2 First Union shares for each Wachovia
        common share.
     -- The value of the new shares issued would be approximately $13.4
        billion.
     -- The combined company will be known as Wachovia with headquarters in
        Charlotte, N.C.
     -- Targeted closing date: third quarter 2001, pending regulatory,
        shareholder approvals
     -- Joint Integration Team has been established to plan and manage
        transition.
 
     The Combined Organization
     -- Management:  Bud Baker, CEO of Wachovia will serve as chairman
                     Ken Thompson, CEO of First Union will serve as president
                     and CEO
     -- The combined board of directors will be composed of nine from First
        Union and nine from Wachovia
     -- Assets: $324 billion (excluding cards, at period end 3/31/01)
     -- Deposits: $182.9 billion (domestic deposits, at 3/31/01)
     -- Branches: 2,900 bank branches
     -- ATMs: 5,100 (at 12/31/00)
     -- Customers: 18.8 million (at 12/31/00)
     -- Employees: 90,296 (anticipated to be reduced by 7,000)
     -- Full Service Brokerage Offices: 592
     -- National Ranking:
        -- No. 4 among U.S. banking companies, by assets
        -- No. 1 in deposit share on the East Coast and No. 2 nationally
        -- No. 1 in cash management
        -- No. 2 bank-owned broker/dealer network
        -- No. 3 in U.S. bank branches
        -- No. 4 bank-owned mutual fund complex, by assets
 
     Shareholders are urged to read the joint proxy statement/prospectus
 regarding the proposed transaction with Wachovia Corporation when it becomes
 available, because it will contain important information. Shareholders will be
 able to obtain a free copy of the joint proxy statement/prospectus, as well as
 other filings containing information about First Union and Wachovia, without
 charge, at the SEC's internet site (http://www.sec.gov). Copies of the joint
 proxy statement/prospectus and the SEC filings that will be incorporated by
 reference in the joint proxy statement/prospectus can also be obtained,
 without charge, by directing a request to First Union Corporation, Investor
 Relations, One First Union Center, Charlotte, North Carolina, 28288-0206
 (704-374-6782) or to Wachovia Corporation, 100 North Main Street,
 Winston-Salem, North Carolina 27150 (888-492-6397). Information regarding the
 participants in the proxy solicitation and a description of their direct and
 indirect interest, by security holdings or otherwise, is contained in the
 materials filed with the SEC by each of First Union and Wachovia on April 16,
 2001.
 
 SOURCE  First Union Corporation and Wachovia Corporation